Registered Design Owner can also be held Liable for Design Infringement

(The content of this post was first published in the ILS Abhivyakti Law Journal and is reproduced here with due permission) 

Whirlpool of India Ltd. v. Videocon Industries Ltd.[1]

Ritvik M. Kulkarni, III BSL LLB, ILS Law College, Pune

Both Whirlpool and Videocon are engaged in the business of manufacturing home appliances in India. Whirlpool contended that Videocon’s ‘Videocon Pebble was an exact replica of its washing machine model, for which it had design registration. Videocon argued that it had also procured registration for its design for ‘Videocon Pebble’; and that a registered design owner cannot be sued for piracy of a design.

Whirlpool argued that on a plain reading of the words “any person”s. 22 of the Designs Act, 2000 (the Act),[2]  includes even a registered proprietor. It contented that if the legislative intent was to exclude registered proprietors, then the Act would have expressly mentioned such exclusion;as can be found under s. 29 of the Trademarks Act, 1999 which deals with the  infringement of a registered trade mark.

Videocon argued that since s. 11 grants a monopoly right to use its registered design, it cannot be sued for piracy. At best, Whirlpool could challenge the validity of the design before the Controller under s. 22(3) of the Act.

Ruling  in favour of Whirlpool, the Court held that a registered proprietor could indeed be held liable for piracy of another’s registered design. Since Videocon obtained registration after Whirlpool did, it could not invoke its registration as a defence. The Court observed that the monopoly right granted under s. 11 was not being absolute, but subject to all other provisions under the Act, including s. 22.

After comparing the visual features of the two products (the washing machines were literally brought to the Court for inspection), the Hon’ble Court concluded that Videocon certainly infringed Whirlpool’s registered design. Since the Defendant’s product was an obvious imitation of that of the Plaintiff’s, the Hon’ble Court upheld the latter’s action for passing off as well and granted an injunction against Videocon restraining it from making or selling the impugned product.

The Court has therefore made it amply clear that one cannot get away by simply procuring a registration for an inherently infringing design.

[1] NM No. 2269 / 2012  in Suit No 2012 / 2012 decided on 27 May, 2014 by Bombay High Court.

[2]22. Piracy of registered design.

(1) During the existence of copyright in any design it shall not be lawful for any person

(a) for the purpose of sale to apply or cause to be applied … the design or any fraudulent or obvious imitation thereof, …;
or …
(2) If any person acts in contravention of this section, he shall be liable for every contravention-

(a) to pay to the registered proprietor … a sum … recoverable as a contract debt, or
(b) … to pay such damages as may be awarded and to be restrained by injunction accordingly:

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Copyright vs. Design: Where Does One End and The Other Begin?

Ritvik M. Kulkarni, III BSL LL, Law College, Pune

A few days ago, I came across a beautifully written article in Loksatta Newspaper titled “Kaleysaathi ki Vyaparasaathi?” (translated: For Artistic Pleasure or For Business Exploitation?), written by Professor Dr. Mrudula Bele. Dr. Bele is an Assistant Professor at the NDMVPS’s College of Pharmacy in Nasik at Maharashtra. She is also a pharmaceutical development scientist and patent consultant

 In her article dated 21st May 2015, Dr. Bele has discussed inter alia the difference between the nature of copyright protection and design protection. She has very succinctly explained the theory behind affording protection on varied terms depending upon the nature of intellectual property. She has stated that while copyrightable works are created from an artistic intent, other industrial works are created with a view to exploit them and gain profit. Furthermore, copyrighted works in any case are commercially much weaker than its industrial counterparts. For this reason, copyrightable works are afforded stronger protection in terms of the period of protection.  

On this note I have taken the opportunity to discuss a few points in relation to the landmark case of Microfibres v. Giridhar and Co.[1] (“Microfibres”) cited and discussed by Dr. Bele in her article.

A design right can be best described as an amalgamation of trademark, patent and copyright. This is because the function of a design is to appeal to the eye of the onlooker; thereby allowing the product (carrying the design) to assume a distinctive feature. Such distinctiveness is most likely to be achieved for a design as it is mandatorily required to be a new design. However, Indian design law does not protect a design if it is functional or it has utilitarian features; it aims to protect only the ornamental properties therein. And unlike copyright, a design must be compulsorily registered to be protected under the Designs Act, 2000; there is no common law remedy of passing off to protect against design piracy.

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This Just In: Bombay High Court Restrains YouTube from Broadcasting IIFW “MasterClass” Episodes  

By Harish S. Adwant, III BSL LLB, ILS Law College, Pune

The Bombay High Court granted an ad-interim ex-parte injunction to the Indian Independent Filmmakers Worldwide Association (IIFWA) (“Plaintiff”) against YouTube LLC and Google Inc. (“Defendants”) The Court said that the Plaintiff has made out a prima facie case of copyright infringement against the Defendants.

The Plaintiff is a body of independent film-makers which aimed to “promote, support and nurture independent cinema by film-makers of Indian origin anywhere in the world.” In light of this objective, IIFWA conceptualized a non-profit project named “IIFW Masterclass”, a series of video recordings, which featured celebrated film-makers, who would share their knowledge and experiences of filmmaking with budding filmmakers, critics and movie enthusiasts. The first season of IIFW Masterclass kicked off in 2010, which was recorded in the form of a cinematographic film and televised on National Geographic Channel.

Wide acclamation of the first season led the Plaintiff to record the second season of the programme.  Subsequently the second season was recorded in 2015. An agreement granted exclusive broadcasting rights to several advertisers, directors, producers and TV channels and prohibited filming/broadcasting by any other person/entity. Within a week, the Plaintiff discovered that ‘infringing recordings’ of the first interview of the second season (which was launched at “FICCI FRAMES” 2015) were uploaded and broadcasted all over YouTube titled “Sudhir Mishra & Rajkumar Hirani | Curtain Raiser of FICCI Frame 2015”. Owing to this, IIFWA filed a suit against Youtube LLC and its owner, Google Inc. as the Defendants.

On 21st April, Justice S.C. Gupte restrained YouTube from “exhibiting, communicating, distributing, storing, caching, transmitting in any manner” the infringing cinematographic film of second season of “IIFW Masterclass” till further orders. Moreover, it also directed YouTube to “expeditiously remove and/or block any and all references to materials and content which fall within the Plaintiff’s (IIFWA) copyrights, and any stored, cached or embedded copies of links which will enable copyright infringement of the plaintiffs content.” The ad-interim injunction order can be accessed here.

The matter is to be heard on 10th June, 2015. Jurisperitus Mumbai represented the plaintiff in the instant case whereas the Defendants remained absent.

Using Unlicensed Software at your Company? Be Ready for Surprise Raids on your Premises under Anton Pillar Orders!

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Ritvik M. Kulkarni, III BSL LLB, ILS Law College, Pune

Under the Copyright Act, 1957 a copyright holder (the Plaintiff) gets a special civil remedy in cases infringement. The Plaintiff can ask the Court to grant an Anton Pillar order to appoint Local Commissioners to inspect the locations and establishments of the infringer (the Defendant) and seize the infringing works. The Plaintiff can avail of this remedy under Order 26 Rule 9 of the CPC, which provides as under:

Order XXVI Rule 9. Commissions to make local investigations- In any suit in which the court deems a local investigation to be requisite or proper for the purpose of elucidating any matter in dispute, or of ascertaining the market value of any property, or the amount of any mesne profits or damages or annual net profits, the court may issue a commission to such person as it thinks fit directing him to make such investigation and to report thereon to the court:

Provided that, where the State Government has made rules as to the persons to whom such commission shall be issued, the court shall be bound by such rules.

The object of the commission under this rule is not to collect evidence which could be taken to court but to obtain evidence which for elucidating matters which are local in character, and it is in the discretion of the court whether to issue it or not[1]. Often in cases of software copyright infringement, the Plaintiff argues that unless the Court grants an ex-parte order, the defendant will get a chance to destroy evidence as it is fairly simple to delete infringing software. Therefore in such cases, a notice to the Defendant is only necessary when the commissioner begins his investigation[2].

In the landmark case of Autodesk Inc. and Anr. v. A.V.T. Shankardass and Anr[3], the Delhi High Court has laid down a few guidelines to abide by, keeping in mind the threat to the Defendant’s privacy:

“(i) The pirated software or incriminating evidence can only be obtained from the premises of the opposite party alone and in the absence of an ex-parte appointment of a Local Commissioner there is likelihood that such evidence may be lost, removed or destroyed;

(ii) Request for ex-parte appointment of a Local Commissioner in such matters is usual and in fact is intended to sub serve the ends of justice as it is imperative to have an element of surprise so that the actual position is not altered; 

(iii) The test of reasonable and credible information regarding the existence of pirated software or incriminating evidence should not be subjected to strict proof or the requirement to demonstrate or produce part of the pirated software/incriminating evidence at the initial stage itself. It has to be tested on the touchstone of pragmatism and the natural and normal course of conduct and practice in trade.

 

(iv) It may not always be possible for a plaintiff to obtain any admission by employing decoy customers and gaining access to the Defendant’s premises. Any such attempt also inheres in it the possibility of disappearance of the pirated software/incriminating evidence in case the decoy customers is exposed. Accordingly, visit by decoy customer or investigator is not to be insisted upon as precondition. A report of private Investigator need not be dis-regarded or rejected simply because of his engagement by the plaintiff. The information provided by the private Investigator should receive objective evaluation.

(v) In cases where certain and definite information with regard to the existence of pirated software or incriminating evidence is not available or where the Court may nurture some element of doubt, it may consider asking the plaintiff to deposit cost in Court so that in case pirated software or incriminating evidence is not found then the defendant can be suitably compensated for the obtrusion in his work or privacy.”

Since this order, there have been numerous cases where such an ex-parte Anton Pillar order has been granted to the Plaintiff. To take an example, Microsoft has been one of the most proactive companies to make a perusal of the above provisions. It has brought infringement proceedings against several companies for allegedly using unlicensed software on their computers.

Remember, copyright in software does not work like it does for other literary works; software copyrights are only licensed to the user and never completely alienated or sold. The main reason for affording this special status to computer programs is based on the fact that there is considerable amount of research done and expenditure made on developing these programs.

Now let’s take a look at how exactly they come across these alleged infringements in the first place.

Huge software companies like Microsoft form a database of their sales; from which they can figure out the computers, and their owners thereof, which are using their software. Next, they cross check their database for the licenses held by (and / or in the name of) these persons / companies. If it turns out that the number of computers carrying the software users is disproportionate to the number of licenses held by the owner(s), they suspect that there is room for infringement on part of the users.

Then in order to get concrete evidence, they hire private investigators to strengthen their claim. These private investigators are required to establish two things: (i) the number of computers or laptops or other related tech installed at the premises and (ii) that these computers carry copyrighted software. The investigators can find out about both these things by simply calling up the concerned officer(s) of the company under the garb of legitimately acquiring other related information. Often, the investigators may even visit the premises of the owner to conduct an inspection. Then on the basis of the preliminary search on the database and the investigations conducted, the software companies immediately apply to the court for an Anton Pillar.

Once the Local Commissioner(s) (“LC”) is appointed, he is required to personally visit the premises of the alleged infringer to inspect the premises for computers carrying the unlicensed software. For the purpose of this visit, the LC may be accompanied by the Plaintiff’s advocate and technical experts (often employed by the Plaintiff). There is a controversy regarding the legality of an arrangement where the Plaintiff’s employees are a part of the commission; since this might prejudice the credibility of the LC’s report.

Read more about this here. (“Can civil courts appoint technical experts in software piracy suits? By Advocate Arun C. Mohan, Madras High Court. Posted on and by SpicyIP.com)

After the inspection is done; all machines found to be carrying the infringing software are sealed, recorded and released on a superdari basis to the Defendant’s authorised agent. The Defendant’s authorised agent present at the spot is required to give a signed undertaking to the Commissioner that the sealed machines and equipment, in their present condition, will be produced before the Court as and when required. The LC then makes his report and produces to the Court. However, such a report is not conclusive evidence of the Defendant’s guilt; the Defendant’s counsel may rubbish the report during the process of cross-examination.

In many cases, once the Defendant realizes that the Court is bound to hold it liable for infringement; the parties commence negotiations, enter into a consent agreement and settle the matter out of Court.

[1] Re Moosa Kutty, AIR 1953 Madras 717

[2] M. Achutan v Kunhipathumna, AIR 1968 Ker 233

[3] {2008 (37) PTC 581 (Del.)}